The housing bulls have really started to run wild now. One of them planted this rose-colored story in Bloomberg arguing that consumer deleveraging points to happy times ahead for the economy. The only problem is that the deleveraging comes from defaultsrather than any paying down of debts. And these defaults are destructive for an economy, not a sign of hope.

JPMorgan Chase, feeling little ill effects from the federal attempts at investigation of their business practices, announced a major earnings jump of 34%. Part of this comes from the fact that the previous earnings report included most of the losses from the Fail Whale trades (which have increased to $6.25 billion, as per this earnings report), so this comes off a low bottom. But in the earnings call, CEO Jamie Dimon attributed the strength to increased consumer lending, and he added that the housing market has “turned the corner.”

When politicians and partisans talk about “the debt,” they are almost always talking about publicly held debt, the balance sheet of the US government. Yet overall debt includes a number of elements. You have state and local government debt, corporate debt, and individual private debt plays a role as well. Household balance sheets are just as important to an economy, if not more so, because the level of private debt can inform the level of consumer spending, which accounts for 70% of the economy. And it turns out that the US is at a six-year low in its overall debt, which at this point presents a problem for the economy.